Femi Gbajabiamila, the Speaker of the House of Representatives, stated that members of the parliament are worried about the impact that the Federal Government’s ongoing borrowing and rising debt profile will have on Nigeria in the long run.
Gbajabiamila bemoaned the enormous deficit in the Federal Government’s projected budget, stating that President Muhammadu Buhari was anticipated to lay the 2023 Appropriation Bill before the National Assembly in early October.
The deficit for the 2023 fiscal year will range between N11.30 trillion and N12.41 trillion, depending on how long the Premium Motor Spirit (petrol) Subsidy Regime is prolonged. The Federal Government is proposing a budget with estimates totaling N19.76 trillion.
In her presentation to the House Committee on Finance on August 29, 2022, during the hearing on the proposed 2023–2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, Minister of Finance, Budget, and National Planning, Zainab Ahmed, expressed concern that the government might not be able to fund treasury-funded capital projects the following year, particularly in light of declining revenue and petrol subsidy.
Ahmed had stated that the PMS subsidy deductions and the challenges in producing crude oil faced by the Nigerian National Petroleum Company Limited (formerly the Nigerian National Petroleum Corporation) have been noted as a major threat to the nation’s revenue growth plans.
The National Assembly returned from its two-month annual holiday on Tuesday, and Gbajabiamila addressed the issue in his remarks at the beginning of session.
He said, “We hope to receive the 2023 Appropriations Bill from the President of the Federal Republic of Nigeria, His Excellency Muhammadu Buhari, GCFR, in the first week of October. In advance of this, the Senate and House Committees on Finance have begun interactive sessions with the Ministries, Departments and Agencies of the government on the Medium Term Expenditure Framework and Fiscal Strategy Paper.
“Some concerns have emerged from these interactions, most prominently of which are the issues of the scope of deficit financing to be proposed in the new budget and the decline in crude oil production due to theft and sabotage.
“While the House appreciates that our current fiscal conditions necessitate borrowing to finance budgetary expenditures, we are, nonetheless, concerned about the long-term impact of this burden on the country and our ability to pay what we owe in a responsible and sustainable way. These questions will be central to our consideration of the 2023 Appropriations Bill when presented.
“We will also be mindful of the provisions of our laws, especially the Fiscal Responsibility Act, as it relates to the scope of deficit financing of the budget. Ministries, departments and agencies of the government should take note that appropriations for new projects will be influenced by the extent to which existing projects have been funded and their performance in executing these projects as intended.”
The Speaker also pointed out that the nation’s crude oil exports are drastically declining as a result of theft and other economic sabotage activities.
“Our crude oil export of 972,394 barrels per day for August is the lowest we have recorded in the last two decades,” he said.
Gbajabiamila added, “At a time when we are already experiencing severe financial constraints, the perpetrators of this brazen heist threaten our ability to serve the Nigerian people and meet the demands of governance and nation-building. Their actions constitute treason against our country, for which they must be held accountable.
“There are mechanisms in place to prevent these sorts of bad actors, and the government spends significant amounts of money each year to protect oil and gas resources in the country. Evidently, these existing arrangements do not suffice.
“As such, there is an urgent need to review them and make the necessary improvements. It is also of particular importance that the perpetrators of these crimes against the state are identified, prosecuted and subjected to the stiffest penalties the law allows. Those who seek to impoverish our country in this manner have declared war against the Nigerian people. They are no different from the insurgents and terrorists against whom we are battling in various theatres.
“The government’s response must be sufficient to convince them of the error of their ways and deter others who might be tempted to join in their treason.
“I met with the Finance Minister and the DG Budget (Office, Ben Akabueze) and made it clear to them that ‘enough of crude oil theft.’ Nigerians don’t want to hear that again. What do you intend to do about it? That’s the important question.”
